With new car sales in January 2009 looking like being nearly 30% down compared with Jan 08 (equating to more than 45,000 units), it’s no surprise that factories and supporting suppliers are in serious bother right now. The only good news is the buoyant used car sector, which means dealers can potentially offset volume drops and resulting dips in profit from new cars with record sales of used. However the feeling is that with decent quality retail stock becoming scarcer by the day on the wholesale markets, as prices rise and dealers attempt to stock their forecourts demand will wane as the appetite for paying more money for the same cars diminishes interest. The situation will also not help car makers who gain little benefit from their dealer network selling mainly used cars and if new car prices rise in line with weakening Sterling, the outlook is very bleak. The factory shutdowns at plants around the country in line with falling demand are a short term measure designed to try and ride the storm, but expect to see innovative packages being offered in dealerships around the country to try and attract new customers and ensure the long term safety of jobs in the factories.